By Mary Welch
Even though Mycogen Corp. acquired Dinamilho Carol Productos Agricolas Ltda., a leading Brazilian developer and marketer of high-yielding hybrid seed corn products, the board of directors of the San Diego, Calif., company is still pursuing reorganization options, including selling the firm.
"The board needs to look at the big picture and there's a lot going on in the industry now," said Michael Sund, vice president of communications and investor relations. "The management, meanwhile, has a responsibility to build a company in order to become the kind of player we need to be and to make our technology pay off. The management is trying to build a more valuable and diverse seed business, which will be a part of whatever scenario the board chooses. We're a work in progress." (See BioWorld Today, April 15, 1998, p. 1.)
The deal, expected to close within two weeks, will be financed through a line of credit provided by Dow AgroSciences, of Midland, Mich., which owns 69 percent of Mycogen.
Financial terms of the acquisition were not disclosed, although the Brazilian company had 1997 sales of approximately $12 million. Since 1993, Mycogen has purchased more than a dozen corn and oilseed businesses and now ranks fourth in North America in seed corn sales.
Mycogen Seeking To Tap South American Growth
"South America, and Brazil in particular, are very high growth areas and it gives us a platform for expansion," said Sund. "About half of Brazil's corn crop is open pollinated whereas about 90 percent in this country are hybrids, which is a high-yielding product. Brazil and Dinamilho will be going toward the hybrid production and we want to be well positioned to participate."
Brazilian corn production averages about 40 bushels per acre, compared with about 130 bushels in the U.S.
The purchase complements Mycogen's operational circle. Dinamilho brings valuable tropical "germplasm" to diversify the pool of corn breeding material that Mycogen has been assembling to develop seed products.
"We have to have the genetics — the plant breeding material — in order to develop biotech enhancements," Sund said. "It's two halves of an equation."
Sund added a decision on Mycogen's future direction should be made within the next 60 days. *